SMAG will discuss the Draft Communications Bill
[Cm 5508-I] at its next meeting in July and will then formally
submit its comments to the Joint Communications Bill Team at the
DTI.

However, SMAG is pleased at this initial stage
of its deliberations to present its comments to the Parliamentary
Joint Committee. The numbers in parantheses refer to the relevant
paragraphs in the Policy document [Cm 5508-III] associated with
the Draft Bill.

1. SMAG welcomes the stated objectives [2.2]
of the Bill:

 to provide "for all regulatory
decisions affecting the communications sector to be made within
a single, over-arching strategic framework";

 to remove "the requirement for
licencing of telecommunications systems" and associated with
this "the introduction of a new regulatory regime for electronic
communications networks, electronic communications services and
associated facilities". SMAG feels it will be important,
however, to ensure that this change does not result in an ill-disciplined
approach to the use of telecommuncations equipment. The process
of type-approval of telecommuncations equipment may need to be
strengthened. Also, the process to be put in place for resolution
of disputes between communications providers in this new environment
will need careful thought. SMAG notes that this has not yet been
done [6.2.1] and stresses the importance of defining as soon as
possible the process;

 to "allow spectrum trading which
will lead to better use of the available radio spectrum";

 to provide "a new, more coherent,
structure for broadcasting regulation that is specifically geared
to the digital age";

2. SMAG notes that the intention is for
the new regulator of (OFCOM) to "have an in-depth knowledge
of all aspects of the communications sector" [3.1.4] and
that it will "be designed from new" [3.4.1]. This is
entirely appropriate, but at challenging task. Existing regulators,
of which the Radio Authority is an excellent example, have been
successful in their role because they have had staff who did indeed
have in-depth knowledge of that particular industry and sector.
It is vital that such specialist sector expertise is replicated
in OFCOM, since the various parts of the communications business
operate in very different ways.

3. SMAG is disappointed that there is no
mention of the need for strong technical expertise in OFCOM. The
FCC in the USA has recently strengthened its Technical Branch,
recognising that good regulatory policy cannot be formulated without
a close understanding of the increasingly complex issues related
to the technology and engineering of communications systems. Undoubtedly,
some of the present functions of the Radiocommunications Agency
can be contracted out to the private sector, but it will be essential
to maintain a team of high-calibre engineering and technical staff
within OFCOM.

4. SMAG notes that the "Secretary of
State may require OFCOM to represent the UK on relevant international
bodies and at relevant international meetings" [4.5.2]. It
is the view of SMAG that international harmonisation is an increasingly
important issue and that OFCOM should have an explicit duty in
representing the UK at international meetings related to regulatory
policy, spectrum planning, and technical standards formulation.

5. SMAG welcomes the duty on OFCOM to "encourage
the optimal use of the electromagnetic spectrum" [5.1.1],
but notes that this may conflict with other objectives such as
universal access provisions. It is not clear how such conflicts
may be resolved.

6. SMAG notes and agrees with the comment
[6.4.1] that "it is necessary to strike a balance between
rolling out the physical infrastructure on which all these communications
depend, and environmental concerns". SMAG has debated such
matters and identified as a major difficulty the situation that
health and environmental issues are split between many different
parts of national and local government. It is critical, in the
view of SMAG, to have a single focus for the health and environmental
issues related to the communications industries. The Bill makes
no comment on whether OFCOM will assume such a duty.

7. SMAG has commented separately on the
Independent Review of Spectrum Management, led by Professor Cave.
On the specific aspect of the use of satellites, SMAG agrees that
there should be a mechanism for bringing all satellite communications
into a common spectrum planning and pricing process such as the
proposed Recognised Spectrum Access scheme. In the view of SMAG,
this is likely to become a longer-term objective because of the
need to gain consensus internationally on such proposals.

8. SMAG is disappointed that there is no
mention of its own role and that of the Cabinet Office UK Spectrum
Strategy Committee. It is suggested that the Bill "give Ministers
powers . . . to intervene if they considered that OFCOM were not
managing the spectrum in the wider interest" [7.4.4] and
that "Ministers should retain powers to make essential political
judgements over the distribution of spectrum and to specify other
public policy objectives and criteria that OFCOM should take into
account in managing spectrum" [7.4.5]. SMAG feels strongly
that there is a need for clarity in the respective roles of Ministers,
OFCOM, and various Advisory Committees. There are a number of
potentially conflicting issues that emerge in the Bill, such as
the indication that Ministers wish to retain powers of intervention
in the allocation of spectrum, but wish to introduce spectrum
trading which will restrict those powers. There needs to be clarity
on the further important issues of how the activities of OFCOM
will be overseen. What role, for example, do other Ministerial
Advisory Committees and the non-executive directors on the proposed
OFCOM Board have in this respect?

9. SMAG agrees with the emphasis placed
on the importance of "free to view" television services
[8.2]. This appears to be the only viable model for digital terrestrial
television services in the near to medium term.

10. SMAG notes the comments on TV set licensing
[8.6.1] and questions if now is not the opportunity to remove
the anomaly of licensing the use of receiving equipment, bearing
in mind the other provisions of the Bill in moving away from licensing
systems or apparatus. The "TV Licence Fee", which is
in fact a funding fee for the BBC, should be re-named a "Public
Service Broadcasting Fee".